Senate looks at bug and business

A hearing examines businesses' ability to "survive" the Year 2000 date change, with a focus on the food and pharmaceutical industries.

September 6, 20026:42 PM PDT

Before the congressional committee responsible for addressing the Year 2000
technology glitch, a health care worker today recommended that insurance
companies provide a one-time 90-day supply of drugs to needy patients at the
end of 1999.

At the hearing, nurse and Y2K consultant Laurene West told the committee that
requiring insurance companies to provide such 90-day supplies would at
least ensure that needy patients have access to medications even if the
pharmaceutical industry suffers interruptions from the Year 2000
computer problem, according to committee staffers.

"The pharmaceutical industry includes a large international component. For
example, diabetics can live long and healthy lives with the help of regular
doses of insulin, a substance mainly produced in Denmark,"
committee vice chair Sen. Chris Dodd (D-Connecticut) said in his opening
remarks.

"If Denmark's insulin production is affected by the Y2K bug or any other
disaster, the thousands of Americans that depend on this drug to control
their diabetes will find themselves in grave danger," he said.

He highlighted insulin because, he said, it embodies the interdependent
nature of the world in terms of business and economies, as well as health
and social welfare.

As a way to underscore the importance of Y2K compliance throughout the
business world, the committee requested that technology consulting firm Gartner Group attend the hearing and
release some of its latest research on Y2K readiness in the small and big
business sectors.

Based on research conducted by Gartner, 30 to 50 percent of all companies
world wide will experience at least one mission critical failure due to the
Year 2000 technology problem. About 15 percent of U.S. companies will experience
at least one mission critical failure and 10 percent of mission critical
failures will last three days, Lou Marcoccio, a research director at the
firm, told the committee.

The research was conducted in the third quarter of 1998. Gartner estimates
that 11 percent of commercial software will still be noncompliant
even after the century date change.

During his testimony before the committee, Marcoccio presented the committee
with a number of recommendations the federal government could take to help quell the effects of the Year 2000 bug in the United States and elsewhere.

Some of those recommendations included: assigning a single U.S. agency, such as the
Global Risk Management Agency, to manage and coordinate
the global impact of Year 2000 problems in the United States; adapting contingency plans to reflect Y2K failures happening over a wide
spread time frame rather than a single day or week; focusing
on managing global dependencies and risks, not just IT systems
within agencies and legislation to support Y2K compliance.

The Year 2000 bug originated in the design of the first computer programs.
Those programs, which remain integrated into a large percentage of
computerized equipment used today, register each year using a simple
two-digit number. Therefore, when "00" rolls around on January 1, 2000,
experts worry that many computers will interpret the date as 1900--causing
either delays, confused data, or complete breakdown.

Dodd and his colleagues also took the time to look back on the seven prior
hearings the committee has held since its inception in
April. Among them, the committee has examined the impact of Y2K on electricity
grids, healthcare, financial markets, telecommunications, emergency
services, pensions and mutual funds, and, today, small and large businesses.

Most companies and regular civilians are aware of their civic duties, said
Dodd, "and have volunteered to tell the Y2K story, recognizing that their
experiences will be useful to others. But there are other companies and
industries that willfully and knowingly chose not to cooperate with our
efforts. In many cases, these are companies whose products are essential for
the day-to-day existence of the average American."

In fact, during her statement, West said she was astonished at how many
doctors and hospitals in her field consider the bug simply an IT problem, rather
than a business management issue.

The next hearing is scheduled for January, when Congress returns from
recess, committee staffers said.